Insurelane Insurance Blog

A new law signed by Illinois Governor Rod Blagojevich will allow children to stay on their parents’ health insurance plan until age 26.

The law will go in effect on January 1, 2009, reported the Chicago Tribune .

Illinois’ biggest health insurer, Blue Cross and Blue Shield of Illinois, says the law will have little impact on cost, reported the Tribune article.

“The cost of the average person in this age category is very low,” said Todd Swim, who is from a Chicago-based employee benefits consulting company.

Still, there were some concerns.

“If additional people are added to a policy, that may increase the amount of claims incurred and will likely cause premiums to increase,” said a spokesperson for America’s Health Insurance Plans, which represents major health insurance companies.

Likely, the biggest effect of this new law will be that fewer people will be uninsured and more young adults can stay covered.

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In an effort to improve health care quality, health insurance companies have put healthcare providers on the hook for making a medical error.

If a surgeon operates on the wrong body part or, worse, leaves an instrument in the patient after a procedure, health insurers won’t pay for the care to correct the error.

These medical errors are on a laundry list of what the industry calls “never events.“

Now Blue Cross Blue Shield of Illinois is joining the trend and will no longer pay for the care of never events, reported the Chicago Tribune yesterday.

The Illinois Hospital Association is on board with the policy, as well.

“We are committed that patients and payers not pay for care related to a never event that was within the hospital’s control and preventable,“ said Elena Butkus, an Illinois Hospital Association vice president.

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Florida Governor Charlie Crist recently passed legislation that allowed health insurance companies to sell policies that don’t have to comply with state-mandated coverage, such as cancer treatment.

Because the policies do not have to provide coverage for certain medical services, insurers can charge as low as $150 a month for the plan.

Governor Crist’s goal was to reduce the number of uninsured residents in the state.

But a non-profit policy research group said the plan has little chance of working.

The research group, the Center on Budget and Policy Priorities, analyzed Florida’s plan and found most uninsured residents can’t afford the cost of even a limited-benefits plan.

Part of the report looked at a previous low-cost limited-benefits plan, the Health Flex plan, which only had 2,300 enrollees in 6 years, reported the Orlando Sentinel.

The report also said that the bare-bones health plans don’t provide sufficient coverage.

“Bare-bones plans provide limited or no coverage for important benefits such as inpatient care, and they often have high deductibles or other cost-sharing charges,” wrote the report.

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A few of the largest U.S. health insurance companies have been setting sights on China to expand their business.

Already, CIGNA, UnitedHealth, WellPoint, and Aetna have opened offices in China, hoping to provide service to citizens of the country.

Even though China provides health insurance for all their citizens, some who can afford it purchase private health plans to supplement or replace their national coverage, reported the Hartford Courant.

But the private health insurance business in China is far from booming. And managed care health insurance (PPOs or HMOs) won’t likely work in the country, wrote the Courant article.

That’s why insurers such as Aetna are exploring other options to offer the Chinese. Aetna, still unsure of the product they will sell, is considering introducing disease management plans. CIGNA offers personal accident and hospital care insurance, along with life insurance.

“It’s small. It’s emerging. It’s a very complicated market,” said Aetna’s President of Global Services, Martha Temple.

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The Federal Emergency Management Agency (FEMA) now ranks and rates areas around the U.S. with the highest flood risk.

The high-risk list included cities such as Los Angeles, Chicago, Washington D.C., and Denver.

In Colorado, FEMA and state engineers are working on five-year project to create a flood map of the whole state, reported the Rocky Mountain News.

“People need to know whether they are in a flood plain. They also need to see the nearest place where they could evacuate and where the nearest high ground is, in case streets are flooded,“ said Nancy Steinberger, a FEMA engineer mapping flood plains in Colorado.

In places FEMA determines a high flood risk in Colorado and the rest of the country, residents may be required to get mandatory flood insurance. And that coverage can be very expensive.

Some areas are found by FEMA to be so high risk, they could be denied coverage altogether.

But many are questioning the accuracy of FEMA’s flood maps, reported USA Today. One lawsuit in Washington D.C. resulted in FEMA withdrawing a flood zone expansion into the downtown area.

Lawyers cited FEMA’s maps as “arbitrary and capricious,” reported the Washington Post.

Still, the risk of flood is high in many places — and it’s important for homeowners to understand most homeowners insurance policies don’t cover flood damage.

“Moving out of the flood plain is one of the best things anybody can do,” said U.S. Army Corps Engineers spokesperson, Ron Fournier.

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A study from the Health Research Institute at PriceWaterhouseCoopers found that healthcare costs for businesses will go up by 10 percent in both 2008 and 2009.

That’s over two times the inflation rate, reported the Minneapolis Star-Tribune and the Associated Press.

The exact percentage that healthcare costs will increase for employers is 9.9 percent for 2008 and 9.6 percent for 2009, wrote the AP article.

That’s not good news for businesses who are already struggling to find affordable health benefits for their employees.

So what are the causes of the drastic increase in cost?

According to the study, healthcare costs are going up so fast because of an increased number of hospital buildings and facility additions, along with the cost of caring for the uninsured.

“Healthcare providers, insurers and employers will have to monitor medical costs carefully if we are to avoid a resurgence of the double-digit annual increases seen in the past,” said Dr. David Chin, who led the study.

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This morning, California Insurance Commissioner Steve Poizner and the chairman of auto and home insurer Mercury will announce rate reductions for more than 1.5 million Mercury policyholders.

Mercury is a Los Angeles-based insurance company who provides auto and homeowners insurance coverage.

They are the third-largest auto insurer in California, reported the Los Angeles Times.

Drivers with a Mercury auto insurance policy will see a savings of about $30 a year, which totals to roughly $41 million for the entire state.

Now with the average price of gas at more than $4 a gallon in the U.S., the rate hikes may help ease the burden of the cost, wrote the Times article.

Homeowners will save anywhere form $83 to $100 a year on their premiums depending on where they live. Renters’ insurance premiums will also go down by 33 percent.

Like many other insurers in California, Mercury has shown strong profits and a reduction in claims, which allows them to reduce rates.

“Mercury is exemplifying consumer-friendly and smart business practices by passing company savings on to their policyholders,” said Poizner.

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There has been a lot of focus on the growing number of Americans who have no health insurance coverage, but that’s not the only problem.

There are also an increasing amount of people who are underinsured — that is, they have some health coverage, but not enough.

According to a new study by the health research foundation, the Commonwealth Fund, one in five people who have health insurance don’t have a sufficient amount of coverage.

In total, it adds up to roughly 25 million citizens — a 60 percent increase since 2003, reported The New York Times.

The groups that were most likely to be underinsured were middle-class workers who were self-employed or employed by a small firm.

What does it mean to be underinsured?

The survey found that those who didn’t have enough coverage were at risk of medical bills higher than 10 percent of their annual incomes, wrote the Times article.

Many who are underinsured also didn’t get needed preventive care, cancer screenings, prescription drugs, and recommended specialist care.

“The underinsured look a lot like the uninsured,” said Cathy Schoen, the author of the Commonwealth study.

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A Louisiana state Senate Committee recently made some key changes on last year’s auto insurance bill that would have increased the liability limits for drivers.

The old version of the bill increased liability for the injury or death of one person to $25,000, up to $50,000 for multiple people, and $25,000 for property damage.

But that version was vetoed by former Governor Kathleen Blanco, who argued it would increase rates for Louisiana residents already struggling and recovering from Hurricane Katrina, reported The Times-Picayune.

State Representative Erich Ponti re-introduced the bill today with higher liability limits than current law, but a bit lower than the vetoed measure.

The new liability requirements are $15,000 for the injury or death of one person, $30,000 for multiple people, and $25,000 for property damage.

State Senator Troy Hebert also helped amend the bill — delaying the effective date of the law to 2010 to give time for insurers and residents to adjust.

State legislators are unsure whether or not Governor Bobby Jindal supports the new bill.

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Legislation that was introduced last year in the U.S. House of Representatives is finally making some headway among lawmakers.

The bill, named the Health Insurance for Life Act, would allow people to purchase COBRA coverage until they turned 65 years old and became eligible for Medicare.

COBRA allows employees who leave their jobs to continue their employer-sponsored health coverage, at their expense.

Current law allows workers to keep COBRA insurance for no more than 36 months, reported the Chicago Sun-Times.

U.S. Representative Mark Kirk argued that taking off the length of coverage restriction would protect people with pre-existing health conditions that might not be able to find a plan in the private market.

The problem with COBRA coverage? It can be very expensive. When employees leave a job, COBRA gives them the right to continue benefits with their former employer, but they must pay the entire the premium themselves.

Typically, COBRA costs a few hundred dollars a month.

“[A]t least we’re saying you can choose to remain insured,” said Congressman Kirk.

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The Wisconsin Association of Health Plans recently announced 17 of their members will provide consumers with estimates on how much they will pay out-of-pocket with their health insurance coverage.

Included in the Association are 13 of the biggest health insurance carriers in the state — such as Anthem Blue Cross Blue Shield, UnitedHealthcare of Wisconsin, and Humana, reported the Milwaukee Journal-Sentinel.

In general, policyholders will be able to get rough estimates of what they might have to pay out of their own pocket for medical tests and other procedures.

It will be easiest for insurers to estimate the costs of medical services of health care providers inside their networks. Guessing the costs of out-of-network providers will be a bit tougher.

Even though these insurance companies will provide more information on out-of-pocket costs, they won’t offer everything.

Insurers will still keep the actual prices of health care services confidential, and they won’t disclose where the lowest rates for medical services can be found.

Still, it will help health insurance shoppers as they search for a plan that fits their budget.

“People who are purchasing health care want to know what they are getting for their money,” said Phil Dougherty, senior executive office of the Association.

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Georgia Governor Sonny Perdue recently signed a bill that will give drivers more underinsured and uninsured motorist coverage.

Under current Georgia law, all drivers must have a minimum amount of auto insurance — $25,000 for the medical bills of another driver, $50,000 for the medical bills of two or more drivers, and $25,000 for property damage, reported the Atlanta Journal-Constitution.

But not every driver has auto insurance, even though it’s required by state law.

If you’re in an accident and the at-fault driver has no insurance or doesn’t have enough insurance, you’ll be stuck with the bills — unless you sue.

The new law will let you dodge both bullets by allowing you to use your own underinsured/uninsured motorist protection in such situations.

Your plan would make up any difference that the at-fault driver or their insurance can’t cover until your policy limits kick in, wrote the Journal-Constitution article.

The law goes into effect on January 1, 2009.

To get the “stacked” coverage, you’ll have to wait until your policy needs to be renewed. If you already have underinsured/uninsured coverage, you’ll automatically get the stacked benefits upon renewal. You can go without the coverage if you choose.

Whether or not the law will cause rates to go up is still unknown, wrote the article. Insurance companies are free to raise or maintain rates as they choose.

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A bill was recently approved in both the Connecticut state House of Representatives and Senate which would broadly expand the state’s health insurance pool. If Governor M. Jodi Rell signs the measure, would up the number of people covered in the pool to around 600,000 people.

With this expansion, argue the bill’s proponents, members will have more bargaining power with insurance companies and could drive down rates.

Under the measure, municipalities, non profit organizations, and small businesses with fewer than 50 employees could buy into the pool, reported the Hartford Courant.

“Finally passing the pooling bill shows that our lawmakers truly do care about the healthcare burden on Connecticut’s towns, school districts and small businesses,” said Michael O’Brien, the president of a Connecticut worker’s union.

But the bill is facing strong opposition from insurance companies, business associations, and Governor Rell’s administration.

One insurer estimated the expansion will cause rates to increase by 4 percent, and they would have to re-negotiate previously agreed upon rates for 2009 and 2010.

Governor Rell has indicated that she is considering using her veto power to strike down the bill.

“We believe the bill could damage competition in the current private market, put an unfunded burden upon the state, and prevent municipalities from having the flexibility to control their employees’ health costs,” said a spokesman for ConnectiCare, a state-based insurer.

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The Kansas Health Policy Authority has been itching for health care reforms in the state, and Governor Kathleen Sebelius has obliged.

Governor Sebelius over the past few months has signed multiple bills for health care reform — including legislation that will create a standardized Medicaid insurance card, increase funding for health care clinics, and expand the Children’s Health Insurance Program.

Under the CHIP expansion, Sebelius extended eligibility limits — which would offer more children in low-income families the state-subsidized coverage. But that coverage can’t go into effect until federal lawmakers offer more funding.

The new bills also expand Medicaid coverage for pregnant women, and offer programs to help them quit smoking, reported the Associated Press.

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Today, a New Jersey state Senate Committee will soon start the debate over a proposal that would require all children to obtain health insurance coverage.

According to the Kaiser Family Foundation, there are around 275,000 children who have no health insurance in New Jersey.

There are roughly 1.5 million uninsured residents in New Jersey all together.

Under the proposal, all children under the age of 18 will be required to have health insurance within one year of the start of the law. Coverage for NJ FamilyCare, the healthcare program for adults, will also be extended to more low-income parents, in hopes that the will get their children insured, as well.

If the law is enacted, residents will have to prove they have health insurance on their state tax returns. For anyone who does not have coverage, they will be sent an application, reported the Associated Press and Courier Post Online.

While this bill would require all children to get covered, the eventual goal is to have universal healthcare for all New Jersey residents by 2011.

“This is a broken and dysfunctional system, and it’s time for a health care plan that works,“ said state Senator Joseph Vitale.

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